Staying aying Inf Informed ormed on on Mark Ma rketing eting - PowerPoint PPT Presentation

Staying aying Inf Informed ormed on on Mark Ma rketing eting Ser ervice vice Ag Agreements eements Shaun White Sh Vice ice President, Public Relations RE/MAX, LLC shaunwhite@remax.com

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts Dodd-Frank Wall Street Reform and Consumer Protection Act • Dodd-Frank Became effective July 21, 2010 • Created the Consumer Financial Protection Bureau (CFPB) • Moved regulation of RESPA to CFPB from HUD

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts CFPB: The New Sheriff in Town • Can create regulations • Enforces regulations • Punishments for violations • No Congressional oversight. Director recess appointment

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts RESPA: Basis for MSA Enforcement • RESPA remains in force • Section 8(a) – No kickbacks, nothing of value for referrals • Section 8(b) – Closing fees must be for services provided • Section 8(c)(2) – No prohibition on cooperative arrangements

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts HUD Interpretive Rule – June 2010 • No direct Consumer solicitation • No direct handling of consumer information • No “exclusive” or “preferred” arrangements • Must have written agreement and consumer disclosure

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts CFPB Makes Its Opinions Known • Lighthouse Title: Fees tied to referrals. Contract thing of Value • PHH Mortgage: 8(c)(2) no safe harbor from 8(a) restrictions • July 2015 Press Release: Response to lenders exiting MSAs • October 2015 Bulletin: A warning to take careful consideration

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts CFPB Outlook on MSAs • Not illegal per se • Risky and difficult to comply with • “Grave concerns about the use of MSAs” • Often used to hide illegal kickbacks • Will continue to scrutinize MSAs

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts MSA Best Practices • Have a written agreement, reviewed by RESPA attorney • Agreements can’t include “exclusive” or “preferred” status • No steering the consumer, always provide written disclosure • No direct solicitation to individual consumers

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts MSA Best Practices - Fees • Fees must be for marketing services, not for referrals • Be able to prove the market value of all services • Independent third party validation of fees • Audit services and fees regularly

Ma Market eting ing Ser ervice ice Agr gree eemen ents ts “MSA Do’s and Don’ts” from NAR